Molson Coors Alcoholic Beverages Industry‚ Team 1 Leah Black Professor Shaked‚ FE449 12:30PM Section Industry Information -Make sure to add info about craft beer -Shift away from beer and towards liquor Key Industry Drivers For beer‚ wine and liquor‚ demand from wholesalers is very important. Companies in this industry must work closely with wholesalers to properly promote their product and ensure shelf space at liquor stores. An issue that arises with wholesaling is state restrictions
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make are taken out of the residual free cash flow. The discount rate for these levered equity flows therefore must reflect the fact that equity is a residual claimant on the cash flows of the firm. 3. What is the weighted average cost of capital? Answer: The weighted average cost of capital (WACC) approach to capital budgeting involves forecasting the all-equity free cash flows of the firm and then finding the value of the levered firm by discounting the all-equity free cash flows at an
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Week 4 Discussion Questions • What are main elements in calculating the cost of capital? How does an increase in debt affect it? How do you identify an organization’s optimal cost of capital? • The main elements in calculating the cost of capital are cost of debt‚ cost of equity‚ preferred stock and common stock. • An increase in debt indicates a higher risk which can increase the required rate of return which raises the cost of capital. Higher debt can also accrue additional costs. • By mixing
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Using the publicly available data‚ we estimated the weighted average cost of capital of the AMD and Duke Energy. For the AMD‚ the WACC is 10.83%. For Duck Energy‚ the WACC is 2.76% When we calculate those number‚ we need to know the equity and debt of the company which can easily find on yahoo finance. The cost of debt and the corporate tax rate that we calculated are also based on the data from yahoo finance. We made Beta for the companies with 10 year ranges and use it to calculate return of
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Cruncker Retrieved from on November 13‚ 2012 http://www.valuecruncher.com/static/dcf Wenk‚ D. (2006‚ August 16). Using an optimal capital structure in business valuation. Retrieved from http://www.kotzinvaluation.com/articles/capital-structure.htm weighted average cost of capital or wacc . (2012‚ November 13). Retrieved from http://www.istockanalyst.com/glossary/WACC
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Marriott Corporation: The Cost of Capital 1. Are the four components of Marriott’s financial strategy consistent with its growth objective? 2. How does Marriott use its estimate of its cost of capital? Does this make sense? 3. What is the weighted average cost of capital for Marriott Corporation? a. What risk free rate and risk premium did you use to calculate the cost of equity? b. How did you measure Marriott’s cost of debt? 4. If Marriott used a single corporate hurdle rate for evaluating
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KWON (N8400822) Honghu Ye (N8106258) EFB340 Finance Capstone Case Study 1 Group S3 Dat Bui (N8360928) JeongHwan KWON (N8400822) Honghu Ye (N8106258) Table of Contents Abstract1 1.0 Introduction2 2.0 Analysis Share price2 Weighted Average Cost of Capital2 Earnings per Share 3 Voting Control 3 EBIT Interest Coverage Ratio 4 Flexibility 4 3.0 Recommendation5 4.0 Reference List7 5.0 Appendix Appendix 18 Appendix 29 Appendix 310 Appendix 412 Appendix 513 Appendix 614
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Name of the Company - Patni Computer Systems Ltd. Name of the Chairman – Narendra K. Patni Background of the Company The Patni Computer Systems Ltd. (Patni) was incorporated on 10th February 1978 under the Companies Act 1956. The company converted itself from a private limited company to a public limited company on 18th September 2003. It is now a leading IT consulting services and business solutions provider in India. The majority
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positive‚ so the project should be undertaken. 8. The rate on Buildwell’s debt is 5 percent. The cost of equity capital is the required rate of return on equity‚ which can be calculated from the CAPM as follows: 4% + (0.90 8%) = 11.2% The weighted average cost of capital‚ with a tax rate of zero‚ is: = [0.30 5% (1 – 0)] + [0.70 11.2%] = 9.34% 9. The internal rate of return‚ which is 12%‚ exceeds the cost of capital. Therefore‚ BCCI should accept the project. The present value of
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Resources Midland Energy Resources is a fully integrated energy company with operations in E&P‚ Refining & Marketing (R&M) and Petrochemicals. Capital budgeting at Midland is done using discounted cash flow method and weighted average cost of capital (rwacc). Corporate Weighted Average Cost of Capital‚ rwacc The primary use of the corporate rwacc is valuation (TV=FCF/(rwacc-g)). While the rwacc may be used for evaluating internal projects‚ the usage will be incorrect owing to the fact that the risk-return
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